2010 | Dalal Street

Big Monetary Policy Coming this Friday

January 25, 2010February 1, 20101 min read

Ahead of RBI’s monetary policy on Friday, 29 Jan, the domestic Macro scenario has improved with industrial production at 10-11% growth, inflation with the Dec reading crossing the RBI’s Mar 10 target of 6.5% and Loan growth returning to the double-digit range.

The street expects the RBI to begin normalizing rates with a 25-50bp increase in the CRR and 25bp increase in repo and reverse repo rates. Surprise could also be a withdrawal/roll-back of some of the liquidity injection measures taken during the crisis. (more…)

Equity Research

Bharti Airtel Impressive Q3 FY2010 – Buy

January 25, 2010February 1, 20102 min read

Some of they things to observe from Bharti Airtel’s Q3 FY 2010 results are – RPM declined 8% qoq to Rs0.52 vs. our estimate of 11%,
implying lower than estimated impact of tariff cuts in 3QFY10, Capex
declined 26% qoq to Rs16.9 bn. Enterprise/ Telemedia revenues declined 4% QoQ.

Continued increase in Network Operation expenses poses downside risk to margins. Continued increase in SG&A expenses poses downside risk to margins. Airtel DTH segment results reported for the first time and EBITDA loss of Rs2.5bn in 3Q. (more…)

Economy, Markets and Macro Views

Big Monetary Policy Coming this Friday – Expectations on the Street

January 25, 20101 min read

The street expects the RBI to begin normalizing rates with a (more…)

Breaking Corporate India Earnings News

ICICI + L&T Profits Down – Pulls Down Sensex

January 21, 20101 min read

ICICI Bank Ltd has announced the following Audited results for the quarter ended December 31, 2009:

The Bank has posted a net profit of Rs 11010.60 million for the quarter ended December 31, 2009 as compared to Rs 12721.50 million for the quarter ended December 31, 2008. Total Income has decreased from Rs 103506.20 million for the quarter ended December 31, 2008 to Rs 77627.10 million for the quarter ended December 31, 2009.

The Group has posted a net profit of Rs 11486.60 million for the quarter ended December 31, 2009 as compared to Rs 15597.60 million for the quarter ended December 31, 2008. Total Income has decreased from Rs 169227.30 million for the quarter ended December 31, 2008 to Rs 141768.40 million for the quarter ended December 31, 2009.

Larsen & Toubro Ltd (L&T) has announced the following Unaudited results for the quarter ended December 31, 2009:

The Company has posted a profit after tax of Rs 7588.20 million for the quarter ended December 31, 2009 as compared to Rs 15204.40 million for the quarter ended December 31, 2008. Total Income has decreased from Rs 89243.20 million for the quarter ended December 31, 2008 to Rs 83557.50 million for the quarter ended December 31, 2009.

Breaking Corporate India Earnings News

Regulatory Impact of lifting trading margin caps

January 14, 20101 min read

India’s Central Electricity Regulatory Commission (CERC) has announced changes to power trading margins. CERC, the power regulator, allows trading margin to be raised by c75% to INR0.07/kwh if sale price exceeds INR3/kwh (c80% of short-term volume).

The margin cap increase is a short- to medium-term positive for power trading companies like PTC India, which now can charge a higher margin for short-term trades. As 80% of PTC’s short-term (ex-cross border) trading volume is above INR3/kWh, it will benefit.

But increased competition from peers and power exchanges should limit the benefit longer term, when the trading margin should be lower than the prescribed cap. Further expect competition to get more intense and margins to fall again, because a) the supply of shortterm power is expected to increase at a faster pace than demand, and b) the number of power traders is expected to increase to 50-55 from the current 44. More important, the power exchanges, which charge only INR0.01/kWh, will also likely emerge as a preferred platform for short-term trading and limit the ability to charge higher margins

Mutual Funds Review

How does the Mutual Fund Industry Look Like ?

January 9, 2010April 7, 20101 min read

Total AUM at INR 7.75 tn; assets worth INR 1.47 tn added in October with mere INR 1.92 tn Equity AUM; dipped INR 0.10 tn (down 5%) M-o-M. The ratio of large-cap AUMs to mid-cap AUMs was at 0.83 in October versus 0.85 in September.

Large-cap funds have increased exposure to banking, FMCG, (more…)

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